In re Applications of )

)

Harbor Broadcasting, Inc. ) File Nos. BALH-990316GG &

(Assignor) ) BAPH-990316GH

)

and )

)

KQDS Acquisition Corporation )

(Assignee) )

)

For Assignment of Licenses of )

KZIO(FM), Two Harbors, Minnesota )

WWAX(FM), Hermantown, Minnesota )

)

Adopted: August 10, 1999 Released: August 10, 1999

By the Chief, Mass Media Bureau:

1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority has under consideration: (1) the above-captioned applications for assignment of the license of KZIO(FM), Two Harbors, Minnesota, and the construction permit for WWAX(FM), Hermantown, Minnesota, from Harbor Broadcasting, Inc. ("Harbor") to KQDS Acquisition Corporation ("KAC"); and (2) a related request for a waiver of the Commission's one-to-a-market rule, which restricts common radio and television station ownership in the same market. The applications and the waiver request are unopposed.

2. In 1998, KAC became the licensee of UHF television station KQDS-TV (previously KNLD-TV), (Channel 21, no network affiliation) and radio stations KQDS(AM) (previously KDDS(AM)) and KQDS-FM, all Duluth, Minnesota pursuant to a permanent waiver of the one-to-a-market rule. See Fant Broadcasting Company of Minnesota, Inc., 13 FCC Rcd 21126 (1998).

3. Grant of the instant assignment applications would expand the existing radio-television station combination because the 1 mV/m contours of KZIO(FM) and WWAX(FM) entirely encompass Duluth, Minnesota, the community of license of KQDS-TV. Consequently, KAC has requested a waiver of the Commission's one-to-a-market rule to permit common ownership of one TV, three FM, and one AM stations in the Duluth, Minnesota-Superior, Wisconsin, Designated Market Area ("DMA"), the nation's 134th largest DMA. For the reasons set forth below, we grant the assignment applications and a temporary conditional waiver request of our one-to-a market rule subject to compliance with the requirements set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999) ("Report and Order").

4. KAC bases its request on the "case-by-case" one-to-a-market waiver standards adopted in the Second Report and Order in MM Docket No. 87-7, 4 FCC Rcd 1741 (1989) ("Second Report and Order"), recon. granted in part and denied in part, 4 FCC Rcd 6489 (1989). Under the case-by-case standard, the Commission makes a public interest determination based upon the following five criteria: (1) the potential public service benefits of joint operation of the facilities, such as economies of scale, cost savings, and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after the joint operation is implemented. Second Report and Order, 4 FCC Rcd at 1753-54. In support of its waiver request, KAC submits a showing which addresses each of the five factors.

5. Radio Ownership Rules. We find that KAC's acquisition of KZIO(FM) and WWAX(FM) complies with the local radio ownership rule's numerical limits. Additionally, we find that the applicants are fully qualified and our review of the record reveals no other circumstances that would preclude grant of the application under our rules. Accordingly, we conclude that, with respect to local radio ownership, KAC's acquisition of KZIO(FM) and WWAX(FM) would be consistent with the public interest.

6. One-to-a-Market Waiver. Based on our independent analysis of KAC's showing, we find that grant of a temporary conditional one-to-a-market waiver, subject to compliance with the requirements set forth in the Report and Order, is consistent with our precedent and will result in economic efficiencies and facilitate enhanced public interest programming without undue adverse effect on competition or diversity in the Duluth market. See, e.g., Butler Broadcasting Co., Ltd., 13 FCC Rcd 12410 (MMB 1998) (20 "voices" in 60th market).

7. Accordingly, IT IS ORDERED, that a temporary, conditional waiver of the Commission's one-to-a-market rule, 47 C.F.R. § 73.3555(c), to permit common ownership of stations KZIO(FM), Two Harbors, Minnesota; WWAX(FM), Hermantown, Minnesota; KQDS-TV, KQDS(AM), and KQDS-FM, all Duluth, Minnesota, IS GRANTED, subject to KQDS Acquisition Corporation's compliance with the procedures set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999).

8. IT IS FURTHER ORDERED, that, having found the applicants fully qualified and that grant of the applications would serve the public interest, the applications to assign the license of KZIO(FM), Two Harbors, Minnesota, and the construction permit of WWAX(FM), Hermantown, Minnesota, from Harbor Broadcasting, Inc., to KQDS Acquisition Corporation (File Nos. BALH-990316GG and BAPH-990316GH), ARE HEREBY GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Roy J. Stewart

Chief, Mass Media Bureau